US buy-side impacted by MiFID II almost doubles from last year

TABB Group study finds 66% of buy-side firms in the US are to be impacted by European regulation, MiFID II.

The amount of firms in the US to be impacted by European regulation MiFID II has increased significantly over the course of a year.

A report into US equity trading carried out by TABB Group found 66% of buy-side firms will be impacted by MiFID II.

This figure increased from last year when only 38% stated they would be directly affected by the European regulation.

Principal and head of equities research at TABB Sayena Mostowfi and research analyst Valerie Bogard, explained the “global nature of operations, client demand and competitive forces” are likely causes of the increase.

The co-authors added: “In conjunction with a shift in regulatory focus from exchanges and broker-dealers to buy-side institutions, a European regulation is set to fundamentally transform buy-side businesses in the U.S.”

TABB Group also found 45% of survey participants stated technology changes as their top initiative in 2016.

MiFID II regulation has “served as a catalyst for further data collection and operational transparency” and buy-side firms are using technology to prove best execution and reduce costs.

Mostowfi concluded: “As the buy-side improves measurement processes and explores the ability of new technology to collect, measure and analyse their broker lists, it is likely that existing broker lists will become even more concentrated.”

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